Question

Required information (The following information applies to the questions displayed below.) On January 1, 2019. Rain Technology purchased at par $82,000, 5%, bonds of Lightyear Services Company. The bonds pay interest quarterly on March 31, June 30, September 30, and December 31. Rain Technology's year ends on December 31. The following information applies to the fair value of Lightyear Services' bonds: Bond Price 12/31/2019 $80,000 12/31/2020 89,000 12/31/2021 84,000 Rain Technology sold the bonds on July 14, 2022, for $87,000. Required: 1. Prepare Rain Technology's entry to record interest received on March 31, 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet General Journal Credit No 1 Date March 31, 2019 Debit 1,025 Cash Interest revenue 1,025

Answer 1

Journal Entry o 31 March 2019

Date	General Journal	Debit	Credit
31-03-19	Cash	$1,025
	Interest Income		$1,025

Workings
Face value of Bonds = $82,000
Rate of Interest = 5%
Interest due for 3 Months i.e from Jan to March
Interest Income = $ 82,000*5%*3/12
=$ 1025